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Production and Inventory Cycle - Coggle Diagram
Production and Inventory Cycle
Production Planning and Design
Required Documents
Customer Production Order
Inventory Production Order
Customer Job Card (CJC)
Inventory Job Card (IJC)
Items to be captured
raw materials used;
direct hours worked by production staff; and
machine hours.
Production Processing
Required Documents
Raw Materials Issues Slip (RMI)
Inventory Management
Functions
direct material costs of raw materials and consumables to work in progress;
direct payroll costs based on hours worked, allocated to the relevant job or production run;
an overhead allocation for each job or production run, based on labour hours or machine hours worked, depending on the nature of the production process and practices of the entity in prior years;
the transfer of accumulating costs between production stages or departments in work in progress; and
the transfer of the final cost of the finished goods manufactured to finished goods inventory.
Four Controls
Production entries must be supported by the relevant documents;
Storage and dispatch of manufactured inventory;
Maintenance of inventory master files; and
Physical and monitoring control
Documentation
Goods Transferred Note (GTN)
Production entries must be supported by the relevant documents
Storage and dispatch of manufactured inventor
Maintenance of inventory master files
physical and monitoring controls
Perpetual inventory
Issue of goods at selling price
Gross profit analysis
Physical control
Monitoring of inventory levels
Planning for a physical inventory count
methodical planning
Fixing the date
Control over stationery
Fixing responsibility
Control over inventory movement
A cut-off point
nstructions to staff performing the count
overall inventory count plan;
o preparation of inventory prior to the count;
o method of counting;
o method of recording the counts;
o responsibility for issuing, collecting and controlling records; and
o the addressee’s specific task
Main Components
